Why World Exports are so Susceptible to the Economic Crisis --The Prevailing "Export Overshooting" Phenomenon

Bih Jane Liu

No 16837, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper provides some evidence of the "export overshooting" phenomenon, i.e., the unusually large deviation of exports from their long-run level. We study the export trends of a sample of 37 countries including both OECD and non-OECD countries over the period of 1994-2009. We find that exports overshot their equilibrium value during economic crises and that the tendency to overshoot was a worldwide phenomenon. The bullwhip effect was the driving force behind such a phenomenon. Moreover, the extent of export overshooting was increasing in more recent crisis, which can be attributed to an increase in cross-border vertical specialization over time.

JEL-codes: F1 F14 (search for similar items in EconPapers)
Date: 2011-02
Note: ITI
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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